Xero's plans for global domination are continuing at an unrelenting pace, as the New Zealand cloud firm follows the lead of the All Blacks by taking the technology industry by storm.
Much like the 2015 Rugby World Cup champions, the Wellington-based company is picking off opponents across all parts of the world, following strong customer growth at a global level.
As revealed to the market via the NZX, Xero has reported a rise in paying subscribers in its half-yearly earnings, reaching 593,000 by September 30, 2015.
Representing an increase of 222,000 from September 30, 2014, and subscription revenue of $89.8 million, according to Xero, there are now over 600,000 subscribers using the company's software.
"Xero delivered strong global growth while improving operating metrics, reflecting positive overall business performance,” says Rod Drury, CEO, Xero.
“Xero continues to grow its capability while delivering strong results.
“We have built a world-class team at all levels of the business who demonstrate disciplined execution to deliver on the global growth opportunity.”
Subscriber growth
Globally speaking, the company has continued its bold expansion plans by becoming the first small business cloud accounting solution to surpass 100,000 subscribers in the United Kingdom, alongside subscribers in over 180 countries worldwide.
In North America, Xero added 12,000 net new subscribers during the off-season to close at 47,000, a 300 percent improvement over subscribers added for H1 FY15.
Closer to home, Xero has also firmly established itself as a cloud accounting market leader on both sides of the Tasman, with 425,000 subscribers in Australia and New Zealand alone.
“The substantial investments in building our team and internal capability is seeing us deliver innovation at a rapid cadence for Xero’s customers,” Drury adds.
“Our global market position has attracted high-value partnerships with world-leading technology companies, financial institutions and banks, giving small businesses access to sophisticated cloud platforms and services once only available to big business.”
At present, Drury says Xero has expanded the solutions ecosystem with over 40 percent of Xero premium editions connecting to one of Xero’s 400+ solution partners while also establishing “significant strategic partnerships and integrations” with top technology companies shaping the future of cloud.
Alongside the delivery of hundreds of updates and more than 40 new features, including payroll in 15 U.S states, the company has forged 11 strategic partnership integrations, automated Australian Tax submission, and invoice reminders.
Financials
By continuing to execute on its global strategy, Xero reported annualised committed monthly revenue of $218.2 million, an increase of $85.9 million (65 percent) from $132.3 million at 30 September 2014.
Delving deeper, the company reported subscription revenues of $89.8 million, increasing $37.6 million (72 percent) from $52.2 million for H1 FY15.
Drury says year-on-year international growth currently stands at 110 percent operating revenue (76 percent in constant currency), with 79 percent subscribers in markets outside Australia and New Zealand and North American subscriber growth of 114 percent over H1FY15.
As the company continues to improve operating metrics while investing for growth, gross margin increased from 67 percent to 74 percent due to improved efficiencies and economies of scale.
In addition, operating and investing cash flows remained steady at $49.5 million compared to $48.5 million for H2FY15 with a closing cash position of $224.5 million.